OFAC Reporting Obligation

The legal requirement to file reports with OFAC, including blocked property reports within 10 days and annual reports by September 30.

TL;DR

TL;DR: When property is blocked, US persons must report it to OFAC within 10 days and file an annual report of blocked property by September 30.

What must be reported

When property is blocked because it involves a sanctioned party, the holder must file a report with OFAC. The blocked property report is due within 10 days of the blocking. In addition, holders of blocked property must file an annual report by September 30 covering the property still held. These reports tell OFAC what is frozen and where, which is how the blocking system is tracked. The annual report covers all blocked property still held, so the obligation continues as long as the funds remain frozen.

Why timely reporting matters

The reporting obligation is part of the blocking duty, not a separate nicety. Failing to report blocked property compounds the underlying problem and leaves the holder without a record that the block was handled correctly. Because enforcement is strict liability, the absence of a report is itself a compliance finding. Accurate reporting also protects the holder by creating a record that the block was handled correctly.

Reporting in agent payment flows

For agents, the practical implication is that a BLOCK result is not the end of the process. Once a payment is stopped because the counterparty is sanctioned, the blocking and its reporting become a documented obligation. sanctionsai.dev returns BLOCK on a flagged counterparty, and tools like dispute_open and kya_verify provide a record trail to support the required reporting.